Renters Have Much to Gain by Pursuing Home OwnershipWritten by Mical Johnson
Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.Yes, there are certain responsibilities associated with owning a home. Landlords will often argue benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment. The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when property value goes up! However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have option of refinancing to a lower interest rate at some point in future should interest rates drop, and this would cause your monthly mortgage commitment to go down. In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.
| | Home Buyers Face Decisions that Affect Their Long-Term Financial Picture Written by Mical Johnson
Seek a Qualified Mortgage Consultant to Ensure Best Results... Home Buyers Face Decisions that Affect Their Long-Term Financial Picture Taking step for prospective home buyers.into home ownership is one of most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find one that best fits your personal long-term goals. First and foremost, you must have a mortgage consultant in your corner that is willing to take time to know what your long-term goals are. Communication is key factor here. Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take prospect’s future financial planning into consideration or guide potential borrower through many nuances of loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames. If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that potential home owner would actually be able to find their dream home, get through negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close transaction, rate that was originally offered is simply no longer available. As a result, unfortunate prospect is bulldozed into a loan program with a higher interest rate.
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